TREASURY

Anti-Money Laundering and Counter-Terrorist Finance Strategy

Edward Balls: The Government are today publishing their strategy to combat money laundering and terrorist finance. This has been drawn up with law enforcement agencies, policy departments and the private sector in order to increase the financial challenge to a criminal and terrorist threat that is historically unique in its scale, complexity and international dimensions.
	In the past year, new measures have been brought forward that help meet this challenge for the future, including:
	a series of reforms to maximise the impact of suspicious activity reports in tracking and tackling criminal and terrorist threats;
	new measures to enhance the UK's terrorist asset freezing regime, including new Terrorism and Al Qaeda Orders and new safeguards on the payment of state benefits to the households of terror suspects;
	new draft money laundering regulations, now subject to public consultation, which extend and promote a risk-based approach to tackling crime and terrorism;
	significant new investigation powers to help trace and recover criminal assets.
	The strategy published today, copies of which are available in the Vote Office and the Library of the House, shows that money laundering and terrorist finance laws passed by this Government are already helping to save lives and bring criminals and terrorists to justice.
	The financial trails left by criminal and terrorist networks are now routinely used as part of the evidential case against them. New data also show that financial institutions are successfully identifying suspicious financial activity—equivalent to around 20-30 per cent. of the estimated annual flow of laundered money in the UK.
	New financial powers are not just helping to detect crime and terrorism, but disrupt these threats as well. Nearly 200 bank accounts linked to terrorist suspects have been frozen in the UK. A bridgehead is being built into the criminal economy, with £100 million of assets being recovered annually from criminal gangs and used to fund further action against them and compensate victims. Financial investigations and money laundering prosecutions have increased substantially. New centres of excellence—including specialist teams created to combat money laundering related to international corruption—are now helping to protect the integrity of the UK's financial system.
	New agreements at international and EU levels have made the financial system an increasingly hostile environment for criminals and terrorists, whilst promoting UK objectives for effective and proportionate financial regulation.
	In order to build on this progress and respond effectively to the changing threat, the Government are today setting out the key strategic priorities for the future, backed up by further proposals that will demonstrate the Government's commitment to their delivery.
	New measures to make greater use of financial tools to combat crime and terrorism include:
	further steps to promote the proactive use of asset freezing powers, including the creation of a dedicated Treasury Asset Freezing Unit that will increase the expertise and operational focus that the Government are able to bring to bear on asset freezing in response to advice from law enforcement and security agencies;
	a significant increase in targets for law enforcement agencies to recover criminal assets—doubling existing targets;
	a new role for Companies House in ensuring that the data it holds are fully utilized by law enforcement agencies against criminals and terrorists;
	New measures to address areas that are particularly vulnerable to exploitation by criminals and terrorists include:
	consultation with the charitable sector on measures to keep it safe from terrorist exploitation, with additional funding of £1 million in 2007-08 to ensure the Charity Commission has the resources it needs to identify and disrupt terrorist exploitation of charities and protect donor confidence;
	targeted action against criminals exploiting "money service businesses" (such as bureaux de change and money remitters) including by replacing the current registration system with a licensing system, underpinned by a new action plan for the supervisor, Her Majesty's Revenue and Customs.
	New measures are announced that build on the UK's approach of risk-based and proportionate regulation that has underpinned the City's competitiveness and reputation for integrity. These include:
	the creation of a forum for financial regulators charged with promoting best practice;
	a commitment to consult on specific aspects of the money laundering rules to reduce regulatory burdens further where possible;
	developing further data-sharing between the public and private sectors, and pooling intelligence better between different public authorities;
	The strategy also announces fresh action at the international level, including through the UK's Presidency of the Financial Action Task Force from July 2007, to identify and tackle the most serious financial threats to international security and ensure an effective international architecture.
	The progress and the future priorities and measures set out in this document will help the Government meet their commitment to safeguarding the UK's prosperity and security for the future.

EDUCATION AND SKILLS

List 99

Alan Johnson: I would like to update the House on progress on commitments made in my statement of 20 June 2006, and previous commitments made in respect of List 99 by my predecessor my right hon. Friend the Member for Bolton, West (Ruth Kelly) on 19 January 2006.
	The safety of children and young people is our top priority. We are introducing changes to ensure that we have the toughest ever vetting and barring system for all those working with, or seeking to work with, children and vulnerable adults. The Safeguarding Vulnerable Groups Act received Royal Assent on 8 November 2006 and will introduce, from autumn 2008, further fundamental strengthening of the arrangements for the vetting and barring of individuals employed with children and vulnerable adults. This will incorporate a robust, independent and expert barring process and will provide a modern and improved vetting service for employers, including parents.
	Pending the implementation of this new vetting and barring service, we have strengthened existing arrangements in a number of ways.
	Revised List 99 Regulations
	My predecessor announced her intention to strengthen the regulations concerning the placing of individuals on List 99 by including on the list automatically anyone with a sexual offence against a child. I have made regulations amending the Education Act 2002 (Education Prohibition from Teaching or Working with Children) Regulations 2003 to extend the range of offences which will result in automatic inclusion on List 99 to include cautions as well as convictions for sexual offences against children. These changes came into force from today and will ensure that anyone aged 18 or over who is convicted of, or cautioned for, a relevant offence from that date is automatically included on the list regardless of whether there is evidence that they have been in previous employment in the education and children's workforce.
	Inclusion on the list will also apply automatically where individuals have committed equivalent foreign offences or are subject to a risk of sexual harm order imposed by a court, from that date. For the most serious offences individuals will be barred without the right to make representations. In other cases individuals will be able to make representations, but will continue to be barred from employment as teachers or school workers while these are considered.
	Consolidated Safer Recruitment Guidance
	In May 2006 new regulations made it mandatory for new appointments to the school workforce to be subject to Criminal Records Bureau (CRB) checks, making this a requirement rather than strongly recommended guidance. This is in addition to the longstanding requirement to make checks against the Department's List 99, the list of individuals barred from working with children in education settings.
	Consolidated guidance, "Safeguarding Children and Safer Recruitment in Education", was issued on 14 November 2006 and became effective from 1 January 2007. This further strengthened arrangements for safe and responsible recruitment of teachers and other staff in schools and further education colleges. The guidance is available online at: http://www.teachernet.gov.uk, and hard copies have been made available to schools and colleges. Employers are therefore now able to refer to a single, clear piece of guidance when carrying out the important background and other checks on new members of staff.
	The guidance is underpinned by regulations which came into force on 1 January 2007.
	The consolidated guidance clarifies the process for checking volunteer staff, including governors who come into regular contact with children, and also sets out new measures that from January 2007 made schools and colleges responsible for:
	Carrying out mandatory Criminal Records Bureau (CRB) checks and checks to confirm previous conduct and identity of all new applicants who have lived or worked outside of the UK (bringing the requirements for these workers into line with the requirements for other staff);
	requesting written confirmation that all the same checks that are required for permanent staff have also been carried out for agency staff, including enhanced CRB checks;
	keeping a single, central record detailing when checks on staff were made and by whom
	Following the Ofsted survey of vetting practice in schools, the final phase of establishing a single central record of checks in every school and college is nearing completion. Officials wrote to schools, colleges and local authorities in July 2006 including detailed advice on compiling the record, and again at the end of October, with further details of the process for completing the exercise, with reminders in November and February. Full, single central records for all staff must be in place from 1 April 2007. The existence of an up to date record in every school and further education college, available for inspection by Ofsted, will ensure that all the checks, including List 99 and CRB checks, that should have been carried out on staff will have been properly made and recorded.
	List 99 Review
	I would like to update the House on progress on the review of List 99 cases. In her statement to the House on 19 January 2006 my predecessor referred to 56 cases where Ministers or officials had decided not to include an individual on List 99. I informed the House on 20 June that all but one of the individuals had been assessed by the police as not posing any threat to children. One individual was being considered further, and had been visited by the police. I can confirm that this person has now been barred.
	In her statement to the House on 19 January 2006, my predecessor also referred to 32 cases of individuals who were on the sex offenders register, but had not previously been referred to the Department by the police. In my statement to the House of 20 June 2006, I said that 22 of the individuals had been barred, and that investigations were continuing in the remaining cases. I can confirm that all 32 individuals have now been barred. I am grateful for the help of the police in following up these cases.
	I am also grateful for the work of Sir Roger Singleton and the panel of experts which he chairs which has been advising the Secretary of State on current and ongoing List 99 cases since January 2006. As at 27 February 2007 there were 4,921 individuals on List 99.
	As well as ensuring that cases considered since 1997 where there were sexual offences which indicated a risk of harm to children were examined, my predecessor also made a commitment to examine similar cases determined before 1997. Sir Roger Singleton and his panel would examine those cases which, had the sex offenders register existed, would have resulted in the individual's inclusion on the register and all cases involving a sexual offence or allegation which resulted in a decision not to include on List 99 or in a restriction or partial bar. The aim of this is to establish whether any individual poses a risk of harm to children and if any action should be taken. As well as advising me on current cases, Sir Roger Singleton's panel are also examining these historical cases.
	This work is ongoing. In her statement of 19 January 2006, my predecessor reported that there were 210 cases where individuals were placed on List 99, but subject to a partial bar which restricts their employment with children to certain types of establishment or types of work in schools. These cases are being examined and, where appropriate, enquiries are being made in order to gather additional information from police and other sources. In 42 of the 210 cases there is no indication of any sexual offence or allegation, and in one case the person concerned is deceased. These cases are now closed. There are also 12 cases where, as a result of further enquiries, the partial bar has been changed to a full bar.
	Work on the remaining cases will continue alongside Sir Roger Singleton's panel's wider review of historical decisions and in the context of forthcoming legislative changes relating to the introduction of the new vetting and barring scheme. A standard or enhanced CRB disclosure will reveal the barred status of the individuals concerned to an employer, and their status will also be disclosed by the required List 99 check.
	This important work is ongoing and I will bring a further report to the House in due course.

FOREIGN AND COMMONWEALTH AFFAIRS

Private Military and Security Companies

Kim Howells: Following a recommendation in the Legg Report into the Sandline affair in 1998, the Foreign and Commonwealth Office (FCO) issued advice to officials on contacts with private military and security companies (PMSCs). This required officials to request permission for contacts with PMSCs whenever possible and for the FCO to consider the impact of those contacts before granting that permission.
	These guidelines have been periodically revised and reissued to reflect changes within the industry. At the last revision in 2004 we issued a separate set of guidelines to deal with the situation in Iraq, where a large number of private contractors are employed in essential security work. Since then, a number of PMSCs have become increasingly active in providing essential security for embassies, international organisations, nongovernmental organisations and commercial enterprises in Iraq, Afghanistan and elsewhere.
	The Government are currently considering the options for regulation of the private military and security industry, which will give officials and others a sound basis for their dealings with PMSCs. While these options remain under consideration, I consider it prudent to keep guidelines for officials in place. A revised set of guidelines to reflect the current situation has recently been approved. Ministers and officials at other Government Departments have agreed that the guidelines should be extended to their Departments, thereby making the guidance applicable Whitehall-wide.
	The principles behind the guidelines are unchanged, the changes are relatively modest and the revised guidance applies to all countries. The revision recognises that contact with the private security companies that protect our staff in certain posts overseas is inevitable and that liaison with companies providing security to other diplomatic missions and international organisations is an operational requirement. In these circumstances, permission for contacts will not be required. However, all other new contacts with PMSCs will still require permission. Most important, it will remain the case that in all circumstances, officials are required to report to the FCO any activity that they suspect to be illegal or unethical.
	I have placed a copy of the revised guidance in the Library of the House.

Hong Kong

Ian McCartney: The latest Report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today. Copies have been placed in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website www.fco.gov.uk/.
	The Report covers the period from 1 July to 31 December 2006. It includes a foreword by my right hon. Friend the Foreign Secretary (Mrs. Margaret Beckett). I commend the Report to the House.

TRADE AND INDUSTRY

Companies Act

Margaret Hodge: The Companies Act 2006, which received Royal Assent on 8 November 2006, will bring major benefits to business by modernising and simplifying company law.
	Lord Sainsbury made a statement to the House of Lords on 2 November 2006, in which he explained that it is our intention to commence all parts of the Act by October 2008. I set out the first part of the detailed commencement timetable by written statement on 18 December 2006. In particular, I announced that we would commence provisions in the Act relating to changes to the First Company Law Directive with effect from 1 January 2007, and the provisions on company communications to shareholders and others, which include provisions facilitating electronic communication, with effect from 20 January 2007. I also announced that we would commence the provisions in Part 28 of the Act implementing the takeovers directive and provisions extending the community interest company regime to Northern Ireland with effect from 6 April 2007, and I laid a draft instrument to commence these provisions before Parliament on 8 February 2007. Certain free-standing repeals would also be commenced with effect from 6 April 2007.
	The Government have had extensive discussion with business and other stakeholders about the timetable for further commencement of the Act. There are a number of important considerations which we have taken into account.
	We want to introduce benefits for business as quickly as possible. It is important, for example, that private companies can benefit as quickly as possible from the deregulatory measures introduced by the Act (such as those on resolutions and meetings).
	We want to minimise the commencement dates in line with our commitment to small and medium sized businesses to hold to common commencement dates.
	We recognise that companies and their legal advisers will need to familiarise themselves with the Act's provisions and make proper preparation for full implementation. In particular, where substantive secondary legislation is needed, this needs to be in place in good time before the relevant provisions are commenced.
	We need to ensure that we implement EU company law requirements falling due during the implementation period alongside our implementation of the Act in a way which minimises the number of changes for business.
	We also need to ensure that the registrar of companies has sufficient time to implement important changes to Companies House systems and processes in relation to areas such as company formation, and give appropriate notice to users of the new forms.
	In the light of these considerations, the Government have decided on the following commencement timetable for provisions not covered by my earlier written statement:
	With effect from 1 October 2007:
	Part 9 (Exercise of members' rights);
	Part 10 (A company's directors), other than provisions relating to directors' conflict of interest duties, directors' residential addresses and underage and natural directors;
	Part 11 (Derivative claims and proceedings by members);
	Part 13 (Resolutions and meetings), and, related to this, sections 485-488 of Part 16 (Audit);
	Part 14 (Control of political donations and expenditure);
	Section 417 of Part 15 (Contents of directors' report: business review);
	Part 29 (Fraudulent trading);
	Part 30 (Protection of members against unfair prejudice);
	Part 32 (Company investigations: amendments).
	The commencement provisions in respect of Part 9 would be drafted so as to enable nominee investment operators to send indirect investors' requests to companies from 1 October to entitle indirect investors to enjoy information rights from 31 December 2007.
	With effect from 6 April 2008:
	Part 12 (Company secretaries);
	Part 15 (Accounts and reports), other than section 417;
	Part 16 (Audit), other than sections 485-488;
	Part 19 (Debentures);
	Part 20 (Private and public companies);
	Part 21 (Certification and transfer of securities);
	Part 23 (Distributions);
	Part 26 (Arrangements and reconstructions);
	Part 27 (Mergers and divisions of public companies);
	Part 42 (Statutory auditors).
	With effect from 1 October 2008:
	Part 1 (General introductory provisions);
	Part 2 (Company formation);
	Part 3 (A company's constitution);
	Part 4 (A company's capacity and related matters);
	Part 5 (A company's name);
	Part 6 (A company's registered office);
	Part 7 (Re-registration as a means of altering a company's status);
	Part 8 (A company's members);
	Part 10 (A company's directors)—provisions relating to directors' conflict of interest duties, directors' residential addresses and underage and natural directors
	Part 17 (A company's share capital);
	Part 18 (Acquisition by limited company of its own shares);
	Part 24 (A company's annual return);
	Part 25 (Company charges);
	Part 31 (Dissolution and restoration to the register);
	Part 33 (UK companies not formed under the Companies Acts);
	Part 34 (Overseas companies);
	Part 35 (The registrar of companies);
	Part 41 (Business names).
	In the light of further consultation with business, we will repeal section 358 of the Companies Act 1985, which provides a power for companies to close the register of members, with effect from 1 October 2008.
	Part 36 (Offences under the Companies Acts), Part 37 (Companies: supplementary provisions), Part 38 (Companies: interpretation), Part 45 (Northern Ireland) and Schedule 16 (Repeals) should come in with the relevant provisions.
	We will aim to make all secondary legislation, including commencement orders, or lay it in draft if parliamentary approval is required, by the end of 2007 to facilitate business preparation for full implementation.
	I am also publishing today a consultative document on the policy issues related to secondary legislation which will need to be made under the Act, and on transitional and savings provisions. Comments are invited by 31 May 2007. Draft regulations following the policy approach outlined in that document will be placed on our website at: www.dti.gov.uk/bbf/co- act-2006/ for comment as they become available. Any changes to the policy decided in the light of the consultation will then be reflected in revised drafting of the regulations.